Texas Attorney General Ken Paxton named in federal investigation of tech firm

The name of Texas Attorney General Ken Paxton, facing a grand jury probe in the state for suspected securities fraud, appears in a federal court document as a major investor in a Dallas-area firm in a U.S. Securities and Exchange Commission investigation.

Court documents in the federal investigation of the technology firm called Servergy do not make any allegations of misconduct by Paxton or draw links to the investigation into securities fraud in Texas.

Paxton appears on a list of investors in Servergy, which had been under investigation for suspected misstatements about orders for its data servers from major firms including shopping site Amazon. The papers were filed in December 2014 in a U.S. court in Texas.

A spokesman for Paxton was not immediately available for comment.

In Texas, special prosecutors, relying on evidence gathered by the Texas Rangers, plan to ask a grand jury in the state as early as this month if there is sufficient ground to indict Paxton on first-degree felony charges for securities laws violations.

Paxton, a Republican who came to office earlier this year with Tea Party support, garnered national attentions for his staunch opposition to gay marriage and offers of support to county clerks who refuse to issue licenses to same-sex couples on religious grounds.

When Paxton was in the state legislature, he was hired to seek clients by an investment firm called Mowery Capital Management, which is facing allegations from the State Securities Board of defrauding investors.

The Texas State Securities Board in May 2014 found that Paxton was not properly registered as an investment adviser in his work with the firm. It reprimanded him and fined him $1,000.

Paxton’s spokesman has called the probe in Texas politically motivated.